CLIMATE:

Feinstein, states support funding boosts for EPA regs

Battle lines were drawn yesterday as the chief Senate architect of the U.S. EPA spending bill and state regulators backed a White House proposal to ramp up funding for programs to curb greenhouse gas emissions, and congressional opponents vowed to fight the agency's efforts.

"I would support it," Senate Interior Appropriations Subcommittee Chairwoman Dianne Feinstein (D-Calif.) said yesterday of President Obama's suggested $43 million boost for EPA programs to limit greenhouse gases in fiscal 2011. "There's no question about greenhouse gas in my mind."

The White House yesterday requested $56 million -- including $43 million in new funding -- for EPA and states to curb greenhouse gas emissions through regulatory program.

President Obama also urged Congress to pass a cap-and-trade climate bill in his budget proposal yesterday. But as climate legislation languishes in the Senate and EPA presses forward with a regulatory approach, some Senate Democrats said they would support increasing funding for the agency's climate programs.

Sen. Tom Carper (D-Del.) called the increased funding to climate programs "encouraging," but said he had not yet seen the president's request for EPA. Sen. Sheldon Whitehouse (D-R.I.) also had not yet seen the proposal but said he would favor increasing EPA climate funding.

Congressional Republicans, meanwhile, are girding for a fight this year over whether to block EPA climate funding, which could play out in negotiations over the EPA spending bill.

Sen. James Inhofe (R-Okla.), ranking member of the Senate Environment and Public Works Committee, questioned whether climate regulations would move forward or get stalled in court battles. "Until such time as the lawsuits are filed ... there may not be anything to do," Inhofe said, "And so why fund something that doesn't exist? That, in my opinion, is premature."

Rep. Earl Pomeroy (D-N.D.) vowed yesterday to fight during the appropriations process to remove any funding that would go toward EPA climate regulations. Pomeroy last month introduced a bill that would strip EPA of its authority to regulate greenhouse gas emissions unless the agency was provided explicit authority to do so by Congress.

"At a time when our country is struggling with a deep economic recession, the last thing I want the EPA to do is start regulating greenhouse gases without specific direction from Congress," Pomeroy said in a statement. "I was deeply disappointed to see this budget proposal include $56 million for that purpose, and if I have anything to say about it, that's not going to fly here in Congress" (E&ENews PM, Feb. 1).

Sen. Lisa Murkowski (R-Alaska) has launched a bid in the Senate to effectively veto EPA's power to regulate greenhouse gas emissions. She introduced a disapproval resolution last month with the backing of 36 Republicans and three moderate Democrats. Murkowski is expected to seek a vote on the resolution, which requires 51 votes to clear the chamber, next month.

"We shouldn't be going down this path to begin with," said Murkowski spokesman Robert Dillon when asked today about the proposed funding levels.

But if the Senate resolution fails, GOP lawmakers have vowed to look at other vehicles to limit EPA's regulatory authority.

Sen. John Thune (R-S.D.), who worked with Murkowski last year on a failed appropriations rider to limit EPA regulatory authority, said in December that he and his colleagues would continue to offer amendments to appropriations bills to prevent EPA from moving forward on climate rules until Congress acts.

Of the $43 million in new funding, $25 million would aid states as they begin to account for greenhouse gases in New Source Review and operating permits; $7 million would go toward developing New Source Performance Standards to curb greenhouse gases from major stationary sources; $6 million would be used to implement EPA's pending greenhouse gas standards for automobiles and developing other mobile source regulations; and $5 million would be used to develop the best available practices and technologies for controlling emissions.

States applaud proposed cash influx

Cash-strapped state regulators say the Obama administration's budget proposal signals a renewed commitment by EPA to support state and local environmental programs.

The fiscal 2011 budget request includes $1.3 billion for EPA state and tribal grants -- a 14 percent boost from $1.1 billion this year. The proposed increase comes despite the president's recommendation to trim EPA's overall budget by about 3 percent.

With state environmental agencies suffering from dwindling resources, "the states are broken and we can't continue to make up for EPA's reductions in federal grants to states," said Bill Becker, executive director of the National Association of Clean Air Agencies (NACAA), an association of state and local regulators.

This budget "demonstrates for the first time in many years that EPA is listening," Becker added.

In addition to the $25 million to assist states with new greenhouse gas permitting requirements, Obama's proposal includes $60 million to support state efforts to implement updated air quality standards, and $45 million for states to enhance their water enforcement and permitting programs.

Several of EPA's top officials hail from state regulatory agencies, which experts say likely played a major role in the administration's budget priorities. EPA Administrator Lisa Jackson led New Jersey's Department of Environmental Protection and air chief Gina McCarthy was Connecticut's top environmental regulator.

Eric Schaeffer, director of the nonprofit Environmental Integrity Project, said Jackson's New Jersey roots probably make her sensitive to the budget shortfalls states are facing.

Both Jackson and McCarthy "understand what works and doesn't work and how not having sufficient funding can eviscerate an otherwise effective environmental program," Becker said.

GHG permitting

The $25 million requested for greenhouse gas permitting activities will be particularly valuable as EPA prepares to begin requiring stationary sources to account for the heat-trapping emissions in New Source Review and operating permits, Becker said.

EPA is preparing to soon begin regulating greenhouse gases from automobiles, which would automatically trigger permitting requirements for stationary sources. EPA has proposed a draft tailoring rule that would require the permits only from the largest industrial sources.

Air regulators told EPA in December that due to funding shortfalls, they would face difficulties fulfilling permitting obligations even at the increased thresholds.

In their December comments, NACAA urged the agency to impose fees on industries to fund the additional workload of regulators' greenhouse gas permitting requirements.

Air regulators may need both an appropriation and a permitting fee, but the money in Obama's budget may get the program moving more quickly than having to spend a year getting a permitting fee program up and running, Becker said.

"It'll be helpful in ensuring that the whole burden doesn't fall upon industry," he added.

But Jeff Holmstead, former EPA air chief under the George W. Bush administration, said that if EPA moves forward with efforts to regulate carbon dioxide under the Clean Air Act, the $25 million to states "is just a small drop in the bucket."

The amount of funding needed will depend on whether EPA or states are able to raise state permitting requirements so that only large sources are affected, Holmstead said.

EPA's tailoring proposal would raise emission thresholds for facilities that need permits from 100 or 250 tons of pollution per year to 25,000 tons of carbon dioxide equivalent per year. But nearly 40 states operate under EPA-approved "State Implementation Plans" that establish a 100- or 250-ton threshold for the permitting requirements, according to NACAA. Those state limits could remain in place until state laws and regulations are modified.

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